SAP’s acquisition of MES provider Visiprise in July redefined a competition with automation companies over so-called manufacturing operations management, where critical manufacturing data resides. Manufacturing execs now face a key decision point in how they will run their companies.
Maybe it’s time for a name change. Call it demand-driven manufacturing. Or call it supply chain agility. Or, if you prefer, continue to call it by the name that might make a chief executive yawn: manufacturing execution systems.
Whatever you call it, a wave of MES acquisitions and partnerships by automation and ERP vendors has propelled MES software from what was an idiosyncratic, custom-built factory tool into a broad, out-of-the box analytical executive decision maker capable of instantly changing plant activity in reaction to shifting demand. For several years, automation vendors such as Rockwell Automation, Siemens, Invensys, and GE Fanuc have fed that trend by buying MES and business intelligence companies, and integrating shop floor information into ERP systems. ERP vendors, on the other hand, have pursued a strategy of partnering with MES companies. But that changed in July when ERP market leader SAP acquired MES specialist Visiprise.
That acquisition sharpened market battle lines that have been developing for several years over which group of technology suppliers will capture what has become known as the manufacturing operations management (MOM) arena. From a technology point of view, MOM is the territory between the shop floor and enterprise application systems, such as ERP. That is where crucial decisions will be made on what approach will be taken to automate critical manufacturing data, such as inventory, scheduling, quality management, and regulatory compliance.
Automation companies define the approach based on their control systems heritage, while application vendors, such as SAP, emphasize a top-down approach in which the financial system executes the commands. The inherent problem is that, when it comes to integration, ERP systems are transactional, whereas plant floor control systems operate in real time. This is where the battle begins to intensify, and it is one reason that SAP acquired Lighthammer, which has technology that can extract manufacturing data and apply analysis in real time, as well as Visiprise, to fill its MES gap.
Now, however, the battle is brewing over metrics, business models, and, most important, semantics. To enable plant floor systems and enterprise systems to communicate, these systems must speak the same language, measure things the same way, and support the same business process management model.
Organizations such as MESA, a group of vendors and manufacturers supporting and using MES, are working to define these areas. SAP and most of the major automation vendors participate as board members and working group leaders. But, victory in the MOM battle could come down to which camp or vendor wields the most weight in the debate that will determine how these systems integrate.
The hope for the manufacturers on the board, including Boeing, Chevron, and Sara Lee, is that the models that emerge will be standards-based and not vendor-specific. These companies are trying to influence the outcome so that MOM is not a product that has to be deployed and integrated, but rather a set of best practices and processes that will allow a mix of best-of-breed applications and technology.
Perhaps the decision that manufacturing executives face as to which philosophy to embrace will be influenced by which side can best articulate the potential to shake MES free from its shop floor roots and establish its true enterprise value. If MES is finally going to embed itself in the consciousness of manufacturing CEOs, a new vocabulary may be in order.
“[A manufacturing executive] doesn’t really care about features or functions of MES, or even that it’s called MES,” says Claus Abildgren, MES marketing program manager for Wonderware, a unit of Invensys. “He cares about reducing the costs of products sold, about reducing energy consumption, about increasing order fulfillment rates, and more accurate allocation of overhead costs.”
Jan Snoeij, principal consultant with consultancy Logica in Arnhem, Holland, agrees. “We definitely don’t want to go in and start talking about MES as a manufacturing execution system. They want to know that they can be in control of their own process, so we need to describe MES to them in terms of their agility, their efficiency, their effectiveness, their ability to proactively come up with initiatives in the supply chain.”
